Author Archives: Jim Kerr

About Jim Kerr

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.

Creating a Billion Dollar Startup

The Process of Creating a Unicorn (>$1B Valuation Startup)

Orbitz was the first company I was involved with that exceeded $1B in valuation. We achieved what they now call Unicorn status.

The Unicorn name came from an article from venture capitalist Aileen Lee in November, 2013, and from that point on, the name Unicorn has permeated the startup culture.

When I look back on the Orbitz experience I see a Company that did a lot of things right even though we were working in uncharted territory. A startup in the Midwest didn’t have the support infrastructure as our West Coast counterparts. In some ways a lack of support was a challenge, but in other ways it pushed us into innovating completely unique solutions that propelled us. Orbitz was one of the first commercial companies to implement RedHat Linux, we were one of the first to use JAVA as a programming language, and we were the first to implement Oracle RAC — all considered standard technologies now days. We were even running our development processes Agile-like a decade before Agile was coined as a term.

Orbitz prelaunch website

Those of you who are familiar with the Orbitz history know the challenges that company has faced over the years. For example, we launched June 2001… 3 months prior to the tragic events that happened on September, 11 2001. We started a DOTCOM during the recession and in the middle of the DOTBOMB. And we started a travel business that generated nearly all of its revenue from Airline ticket sales when many of our Airline partners were on the verge of bankruptcy…

So how did we survive and achieve Unicorn status?

First, I believe the main reason we survived is because we hired super smart, dedicated, hard working people that sincerely cared about our success. Our recruiting process was rigorous to say the least. Our CEO, Jeff Katz, personally interviewed every new-hire and our CFO, John Park, was incredibly scrupulous when it came to adding headcount and increasing operating cost.

At the time we viewed these strict policies negative because it put a lot of work on our staff. We saw the money come in from our Airline founders and at the time it was easy to think there was an unlimited bucket of money raining on us. However, as I look back I see the policies our executive leaders enforced is what ensured our survival. If they had wasted the money we received in stage funding like many businesses do now days we would have never survived the completely unexpected events of 9/11.

Secondly, we focused on our customers and continually tested the market. We released rudimentary functionality as we built the platform and continually tested with our customers. Ideas we thought might be good that weren’t overwhelmingly adopted by customers were scrapped. We averaged 2 out of 10 ideas that actually landed in production. This approach established a very loyal customer-base that stayed true to our brand.

First Orbitz Website June 2001

First Orbitz Website June 2001

We carefully built our functionality starting with Air, then Car, then Hotel, then packaging. We didn’t try to build everything at once. We partnered with other suppliers until our platform was ready. This approach gave us cash flow early in our evolution that ultimately led to us surviving 9/11. We were 100% on our own after 9/11 and received zero funding from any third party source.

Unicorn Classification

I put Unicorn businesses into two buckets. There are the Hype businesses that quickly hire a ton of people and generate loads of press. And there are the Quiet businesses that grow strategically.  In Chicago we have examples of both.

Groupon is a good example of a Hyped business. They grew fast, raised millions in funding, and benefited from an unlimited sea of press. Now they are on the decline. They recently laid-off 1,600 employees, closed operations in non-profitable areas, replaced many of their executives, etc. It is clearly going to be challenging for them to survive long-term.

Unicorn examples in Chicago that I classify as Quiet include Signal, who’s CEO is Mike Sands the former Orbitz COO, and Raise.com who is led by some young and smart entrepreneurs. I had never even heard or Raise.com until recently. They are a great example of a solid well thought out business. They are growing slow and steadily creating value for their customers without taking unnecessary risk or setting unrealistic expectations through overly Hyping their business. It is very impressive that they have achieved >$1B in valuation quietly in a small startup market like Chicago.

Understandably it is hard to take the quiet route when we see the Hyped businesses everywhere we look, but we need to keep in mind that the point of creating a company is to build a long-term viable organization. Investors are ultimately investing in and trusting the leadership team. Behind every penny is someone that trusts us to deliver what we promised. As entrepreneurial leaders we need to take that responsibility seriously and spend every dime like it is our own.

The Business Model

The WSJ recently released its Billion Dollar Startup Club list. About thirty-nine of these companies are platform businesses. The other 39 are linear. According to INC Magazine, investor confidence is approximately 25 percent higher in the platform startups than linear.

“Picking the right business to be in is the most important decision when starting a company.” Tony Hsieh, Zappos startup CEO

The key is to pick a business model that has a high potential with less competition. The platform business model, in my opinion, is the best for long-term sustainability. Zappos is a good example. They focused on selling a small subset of products (Shoes). As the online shopping world evolved their market share shrank opening them up to acquisition by Amazon. The Zappos business has continued to be financially pressured and they continue to struggle to achieve profitability. Amazon, is another example. Although they are a household name around the world they still struggle to achieve profitability. There platform business Amazon Web Services, however, is incredibly successful.

Platform businesses are typically based on consistent revenue model. Signing up customers for a monthly fee helps guarantee cash flow vs businesses like Orbitz, Zappos, Groupon, etc. that must attract customers every day to generate sales.

Accordingly, there are many traditional businesses such as Adobe who have pivoted from a linear product sales offering to a platform subscription. Microsoft is doing the same with Office 365. Constant monthly revenue is the key to long-term survivability. Products bring in big $$ in large spikes whereas platform subscriptions are more predictable.

Ok, we agree we need to build a platform. What comes first?

The hardest problem with building a platform businesses is that you need two components to be successful that are dependent upon one another. If Uber wants to grow, it needs more drivers to get customers and more customers to get drivers. Neither works without the platform behind coordinating both supply and demand.

When building a platform revenue doesn’t come until the platform is operational. If you build customers first based on Hype and then don’t deliver they will quickly become dissatisfied, leave and likely never come back.

I am a proponent of continuous A/B testing. Roll features out, test, evaluate and change. The sooner a working prototype is in the world the quicker you find what works and what doesn’t as well as start generating revenue. Uber started small, perfected their platform and then grew market by market, which is clearly why they are incredibly successful.

The problem with many platform businesses is they build what they “think” is right. By the time it goes out the door they often discover the customers don’t embrace the product as expected. This process has killed many tech businesses. They lose their valuation when the product doesn’t work as promised and they die on the vine. Releasing small features that attract subsets of customers enable a business to learn what customers want while generating revenue. Again, look at the Uber model. They started in a niche market testing, evolving and perfecting their platform to achieve worldwide recognition and valuation they have now.

Go Mobile First

Mobile is the key to capturing seamless engagement with end-users. Most want to start with a full-blown fully functioning, “perfect”, website, but I believe perfecting and testing an engagement model on mobile should be considered as the first priority.

A company doesn’t have to launch with both iOS and Android apps. There are countless examples of platforms only leveraging one operating system at launch and after becoming successful build the other. At Orbitz, we started with iOS apps. It was several years later before we introduced apps for Android. The key is to prove that you can get strong recurring usage on one operating system and then replicate that model.

Show me the money

Raising seed funding from family and friends is the easiest way to start a business. They invest in you without needing to understanding what you are doing. However, unless your friends are Warren Buffet and Bill Gates, it is hard to raise sufficient capital to build a Unicorn. Unicorns need to be valued over $1B, which is done by investment firms that comes through staged funding. Institutional Capital firms are necessary to raise material capitalization and help get to the coveted $1B valuation, establish a brand and beat others that may end up launching a similar concept.

People often think of a VC firm as organizations that take risks. This couldn’t be further from the truth. VC’s have investors that expect them to generate ROI for them. Ones that don’t generate a return for their investors don’t last long. Institutional capital firms look for a strong management team, a product they can understand and a business model that can generate revenue.

Conclusion

At the end of the day the people are the key to success no matter what you are doing. Surround yourself with only “A player” people. When thinking about people I follow the saying, “Hire Slow and Fire Fast.” Use the core team to develop the business Idea with a strong slant to creating a platform business. Start with mobile development first and test small features and start generating cashflow. Use the A/B testing experience to refine the business plan. Use family, friends, goFundMe or other sources to get startup funding. Then only when having a mature enough business model approach Institutional Investment firms. Finally, work through staged funding steps exceeding all objectives at each stage and achieve Unicorn status.

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.

Square’s IPO…What Happened?

“Square’s IPO popped on the first day. What does that say about unicorn valuations? #SquareIPO”

The IPO process is fascinating.  Back in the dotcom era every tech nerd including me wanted to take a business public.  I was fortunate enough to be a part of Orbitz going public twice (NASDAQ: ORBZ; NYSE: OWW).  However, sometimes you have to be careful for what you ask for – you may actually get it…  What we found on the other side of the IPO was a scary place that we were not ready for.  Orbitz was overly hyped when we went public both times.  It is an exciting feeling before an IPO seeing the initial sale price set high and we were all doing the mental conversions of our options in our heads.  I was even in lucky enough to be in NYC ringing the opening bell!

 

ORBZ_02

The unfortunate fact about tech IPO’s is that it is more a game of chance than any of us would like to believe.  Apple, Google and Facebook are the success stories we all aspire to be like; however, truth be told most tech businesses that go public drop like a rock out of the gate – in the industry they call this rollercoaster ride a “Market Correction.”  Orbitz for example, was listed around $20 something a share on NASDAQ as the initial strike price and hovered around $6 after.   The stock fell losing millions for our initial investors.  Our second IPO on NYSE wasn’t much better.  We went out around $15 and no matter what the leadership team did the stock price never reached that value again.

Orbitz and Square are not alone in the rapid decline of valuation after an IPO.  Chicago Based Groupon (NASDAQ: GRPN) have found themselves in a similar position.  There 5-year high was $26.19.  As of this writing, they are trading at $2.79.

YahooGroupon

So what is the deal with IPO’s?

Personally I think it comes down to how the valuation process works.  Everyone wants to experience the ride that Google and Apple had.  The process of getting there, however, is not easy.  The vast majority of IPO’s I’ve seen end up overestimating their valuations through a process that is not easy for startup tech leaders to navigate.  There are tricks that seed investment firms use to alter the formulas that calculate the valuation of a pre-IPO company.

As an example, when a Company gets to a certain FTE count then their valuation increases.  When they burn through their rounds of funding they get more money because their valuation goes up.  Every time a pre-IPO business hits a stage the hypothetical valuation of their business increases.  What is mind-blowing to me is that revenues are not weighted heavily in the valuation process.  They can be losing millions a day and continue to have a high valuation.  Unfortunately no one wants to admit that their numbers are overly inflated.  If a valuation goes down a pre-IPO a business is very likely dead.  No one will invest in them.  They will be out of money and are either acquired at a discount or bankrupt.

What happened to Square?

I don’t have any personal insight on Square, but chances are they fell victim to the same catch-22.  They have a good product, they have market recognition and they have experienced leadership.  So what happened?

I found this October 22, 2012 quote on the web that makes me think they were going through the cookie cutter increase our valuation process:

“Square, the mobile payments company started by Twitter co-founder Jack Dorsey, announced today that it will be moving its corporate headquarters next year to 1455 Market Street in San Francisco’s Central Market neighborhood (next to Twitter). The move will help accommodate the company’s hiring plans, which include adding about 600 employees over the next year to reach a total of 1,000. Square expects to move into its new location, which will have a chef’s kitchen and rooftop deck, by mid 2013.”

1000 employees is a big number!  How can any business manage the rapid growth in employee population?  Why would they need to grow to 1000 FTE’s?  What are the additional 600 people going to do for them?  Why not outsource and take advantage of more competitive labor rates?  Why?  They can’t.  They very likely had an objective to hit 1000 to get to their next round of funding and increased valuation.  If they don’t hit whatever the magic target is then chances are they can’t get the next round of funding and die on the vine.

“A decrease in valuation is a big deal for everyone, not just the employees of Square.  The Venture firms investing in them lose their money.  The people who invested in the Venture firms lose theirs.”

Ok, I’m sure by now you are all saying yea great.  What are we to do about it?  First, don’t invest in IPO’s just because there is a lot of hype.  Take the Warren Buffet approach. Invest in businesses you personally understand and love.  Accordingly, look at their product objectively and do your own evaluation.  Is the business truly unique?  Is it worth what they are selling it for?  Why is this product better than others out there?  Ask yourself if you, your friends, family and coworkers would buy/use it and continue to buy more as products evolve (public companies are expected to have solid quarterly revenue growth).  Then look at their competitive landscape.  In Square’s case, it isn’t that difficult to find formidable competitors.  Google, Paypal and Apple are in the mobile payment business.  Stable Businesses like Intuit is as well.  How is Square or any startup going to compete in a marketplace they do not control with highly capitalized and experienced competitors?

Step back and think about Apple, Facebook and Google.  Why have they been a big success?   They have a solid business plan that is clearly tied to revenues.  Facebook resisted for awhile, but they were smart about implementing a profitable revenue stream.  They monetized their captive audience well and respond quickly to their customers.  Google did the same with search, which is still by far their #1 profit center.  Google is so good they cornered the market in search and turned their company name into a verb Googling.  Apple lives by clearly understanding their customers.  People buy Apple products without even knowing what it does — and they pay top dollar for it.  Apple has a very loyal following.  They have  done an amazing job cultivating their customerbase.

The business plan with realistic revenue streams, not the employee count or how many rounds of investments they have had is what makes the difference.  My recommendation is to read the SEC Filings carefully before investing in any IPO.  Some of the stuff in those documents make my hair stand up on ends.  Here are some quotes that I pulled directly out of Square’s S1 filing:

“Our growth may not be sustainable and depends on our ability to retain existing sellers, attract new sellers, and increase sales to both new and existing sellers.”

“Our business has generated net losses, and we intend to continue to invest substantially in our business. Thus, we may not be able to achieve or maintain profitability.”

“We derive substantially all of our revenue from payments services. Our efforts to expand our product portfolio and market reach may not succeed and may reduce our revenue growth.”

“Our quarterly results of operations and operating metrics fluctuate significantly and are unpredictable and subject to seasonality, which could result in the trading price of our Class A common stock being unpredictable or declining.”

“An active trading market for our Class A common stock may never develop or be sustained.”

“The market price of our Class A common stock may be volatile, and you could lose all or part of your investment.”

Another area to explore with the SEC is who is actually making the money from the public offering.  In the case of Orbitz’ second IPO (NYSE OWW) we didn’t actually benefit a penny from the investment.  We raised somewhere around a billion dollars and the money was transferred from our bank account to Travelport (NYSE: TVPT) who owned 49% of the Company and was private at the time.  They in-turn transferred the funds to to their owner Blackstone who was also private.  I’m told those funds were eventually paid to Blackstone investors as dividends.  Another area in the Orbitz case was we were over valued from when we were acquired by Cendant.  We were actually carrying a loss on our books for being over valued by savvy investors that had nothing whatsoever to do with our leadership team.

Orbitz had outstanding leadership and we did what we could to keep the company going.  The Company survived for 15 years (I was there for 11 of those years); however, in the end the pressure from investors to grow stock eventually took the toll on the company leadership and they sold the company to Expedia (NASDAQ: EXPE) – our arch rival.  Chance are Square will eventually take the same path.  It is going to be challenging for them to move their stock price up with the cards already stacked against them.

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.
Multitasking is out -- Pinpoint focus is in

Multitasking is out — Pinpoint focus is in

Have you ever had this experience?…

You’re working on a project that requires creativity, such as drafting a report or working on budgets, and suddenly the phone rings, jolting you out of deep concentration. Even if you don’t answer the phone, it takes a few beats before you can re-anchor into what you were doing before.

That time lapse is your “mental CEO” shifting from one task, with a specific goal and set of “rules,” to another, with a completely different goal and set of rules. That shift takes time. The more complex the tasks, the longer the shift takes.

What else are you trying to do while reading this posting?

Sure, we can multitask. We might even believe we can do it without losing efficiency. But we would be fooling ourselves.

It has been proven in scientific studies that toggling between tasks slows the brain down. In effect, multitasking makes us momentarily stupid — unable to establish priorities, focus, or integrate anything new.

Have you ever tried to read your email while listening to a conference call? How about trying to have a serious conversation on your cell phone while driving?

Yes? Then you know that neither was done with your full presence or capacity. It’s as if you weren’t there for half of the time. You neither fully understood the emails nor fully integrated what the call offered. Too little of your consciousness was on driving – scary – and you couldn’t fully connect in the conversation.

We all know that multitasking has real costs. So why do we still do it?

It’s ingrained in our habits. All the “time-saving” devices of our technological age encourage us to be distracted and lose the ability to focus. And that’s a significant loss because focus is what brings prosperity. Distraction keeps us from it.

Focus means your full attention. Here are five daily practices to attain pinpointed focus and stop multitasking.

1. Clear your desk of anything unrelated to your current goal. Things command attention. The less you have before you, the less likely you’ll be distracted. If you are in an open environment like we are at Orbitz then schedule a conference room.

2. Schedule your time into blocks so that you can focus in on one individual task at a time. Include separate blocks for completing high payoff actions, emailing, working with clients, planning, etc. Then set sacred boundaries around those tasks. Complete one, then move on.

3. Do the most important thing first. High payoff actions are the things that will have the biggest positive impact on your success. What will bring you the results you want most quickly? Put that first, always.

4. Take short breaks away from technology between time blocks or tasks. Take a walk around the block, play music, do something physical or creative. This will clear your mind and help your mental CEO recalibrate to the next task.

5. Plan for tomorrow. Schedule 1 to 3 high payoff activities for the next business day.

Become a master single-tasker!

Take the next 30 days and replace your multitasking habits with these five daily practices and see how much more you accomplish and with less stress.

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.

7 Disciplines for High Performance

It has been awhile since I’ve posted to my blog.  I thought I’d talk a bit about Disciplines for High Performance.  What are some things that High Performing people do?

Goal Setting
Every morning, take three to five minutes to write out your top goals in the present tense. Get a spiral notebook for this purpose. By writing out your ten goals at the beginning of each day, you will program them deep into your subconscious mind.

This daily goal writing will activate your mental powers. It will stimulate your mind and make you more alert. Throughout the day, you will see opportunities and possibilities to move more rapidly toward your goals.

Planning and Organizing
Take a few minutes, preferably the night before, to plan out every activity of the coming day. Always work from a list. Always think on paper. This is one of the most powerful and important disciplines of all for high performance.

Priority Setting
The essence of all time management, personal management, and life management is contained in your ability to set the proper priorities on the use of your time. This is essential for high performance.

Concentration on your Highest-Value Activities 
Your ability to work single-mindedly on your most important task will contribute as much to your success as any other discipline you can develop.

Exercise and Proper Nutrition
Your health is more important than anything else. By disciplining yourself to exercise regularly and to eat carefully, you will promote the highest possible levels of health and fitness throughout your life.

Learning and Growth 
Your mind is like a muscle. If you don’t use it, you lose it. Continuous learning is the minimum requirement for success in any field.

Time for Important People in your Life 
Relationships are everything. Be sure that in climbing the ladder of success, you do not find it leaning against the wrong building. Build time for your relationships into every day, no matter how busy you get.

Action Exercise
These seven disciplines will ensure that you perform at the highest level and get the greatest satisfaction and results from everything you do. Study these seven disciplines and then make a plan for how you can incorporate each of them into your daily life.

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.

Boosting Moral

 

There’s no denying that occasional, unexpected rewards from management can really lift a group’s spirits. Thoughtful gestures such as a surprise lunch together, tickets for an event that can be shared later with a spouse or a snazzy new espresso machine for the office speak louder than words for saying, “We appreciate you.”
When budgets were especially tight this past year, smart companies rewarded heavily burdened employees with bonus paid time off. Whether it was a half day, a full day, or a chance to plan for leaving early on Friday afternoon, these companies showed they really cared about taking the “mean” out of lean times.
But boosting morale in a consistent, meaningful way is a day-in, day-out way of life for businesses who want to retain valuable talent. Here are some best practices from the champions:
  • Communicate honestly & clearly about where the company is headed and what management is doing to get there. Give employees a choice of ways to submit questions and give feedback to management. Conduct an employee survey to find out what their current perceptions and concerns are. Address their concerns.
  • Don’t shy away from difficult conversations. Your silence leaves a void for gossip and (probably inaccurate) speculation, while your straightforward honesty builds trust and credibility. Respond to employee questions, even when you have to admit you don’t know the answer or have made a mistake that requires a course correction.
  • Show employees how their role fits into the big picture. Connect individual, group and departmental goals to company goals. Connect company goals to the mission and potential to positively impact stakeholders and the industry at large. This underscores daily activities by connecting them to the team’s shared effort to achieve outcomes and makes work more meaningful in the process.
  • Apply fair, consistent and transparent policies in the workplace. Don’t selectively allow certain people to, for example, borrow company equipment for personal use, bring dogs or kids to work, or sidestep dress codes unless everyone can. Have a policy for telecommuting and flexible scheduling that is based on a logical evaluation of roles and tasks, not preferential treatment for individuals. If some employees have earned extra privileges through performance, be sure that the reasons (and the way others can earn the same privileges) are clearly understood.
  • Be respectful. By all means acknowledge when an employee has made improvement in an area where they’ve struggled, but be sensitive to their feelings by giving reinforcement in private when appropriate.
  • Show appreciation publicly. Make it a point to praise employees for a job well done in front of their peers and customers, but be sincere or don’t bother. Everyone else’s baloney-indicator works as well as yours does. And there’s no need to limit positive feedback to an employee of the month program. Just as it takes (depending on which marketing expert you listen to) 3 – 7 repetitions for a person to absorb a message or recognize a brand name, it takes multiple messages for employees to really believe that you see and value their contributions. Remember that your frequent, honest praise for a job well done establishes a foundation of respect between you. This is the foundation that will give employees the confidence to feel safe discussing areas where they need improvement.
  • Deliver development opportunities. Professional development is a vote of confidence in their abilities and an investment in employees’ career progression within your company. They recognize both, and the bonus (beyond improved performance here and now) is that the company will have a healthier internal talent pool to draw from as growth opens up new positions.
  • Offer a sense of ownership. Invite employees to make suggestions for better ways to get the work done. Really listen. Then give them responsibility for integrating a good idea or process into the job. Adults appreciate being treated with respect for their abilities and judgment. At the same time, over-extended managers need to strengthen the “delegation muscle.” For example, use a performance management and development process that actively involves employees in decisions about enhancing their competencies.
  • Allow choice & control when you can. Being micro-managed should be the consequence of a pattern of poor decision-making, not a standard operating procedure. Preferred “best practices” should be established because they are clearly connected to results, not based on one person’s whims. Look for opportunities to give employees healthy autonomy over their personal work space and processes, as long as they are not in conflict with company values.
  • Align business practices with core values. Really make working at your company something to be proud of. “Walk the talk” is just another way to say “Have integrity.” It means that the values your company claims on the company web site or in documents are in fact visible in its actions toward employees, customers and vendors.

 

Managers and their teams thrive in an atmosphere of mutual respect and trust. An assessment of the entire group provides a team motivators and behaviors report that shows at a glance where the group’s strengths and potential lie.
Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.

Responding, Not Reacting, To Life

Starting a new job got me thinking about how to deal with major life changes.  When you respond to life, that’s positive; when you react to life, that’s negative. Example: You get sick and go to the doctor. Chances are good that after an examination, they will give you a prescription with instructions to return in several days.

If, when you walk back in the door, the doctor starts shaking her head and says, “It looks like your body is reacting to the medicine; we’re going to have to change it,” you probably would get a little nervous.

However, if the doctor smiles and says, “You’re looking great! Your body is responding to the medication,” you would feel relieved. Yes, responding to life is good.

A few years ago, there was much turmoil in the U.S. job market. People were losing their jobs through downsizing, mergers, and takeovers. This created some unusual opportunities for many people. For example, the Wall Street Journal reported that in a five-year period, more than 15 million new businesses were created, well over half of them by women. Very few of the women had any marketable skills, and all of them had great financial need.

Most of the new businesses were “trust” businesses, meaning that the women collected the money before they delivered the goods or services. Many, possibly most, of those new businesses would never have been started had not an unfortunate event occurred in the people’s lives. When those events did occur, and needs became obvious, the women chose to respond, and there is little doubt that many of them are better off now than they were before.

The message is clear: If you respond to life instead of react to it, then you’ve got a much better chance of achieving success.

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.

The Challenge of Change

The history of Henry Ford and the Model T illustrates a fundamental truth about leadership: leaders never outgrow the need to change.

On his way to dominating the automotive market with the Model T, Henry Ford embodied innovation and progress. By pioneering the assembly line, Ford slashed the amount of time needed to manufacture an automobile. He installed large conveyor belts in his factory, allowing workers to stay in one place rather than roaming around the factory floor. He also shortened the workday of his employees from nine hours to eight hours so that his factories could operate around the clock.

The efficiencies Ford introduced allowed cars to be manufactured at a fraction of their previous costs. In under a decade, automobiles went from being luxuries affordable only to the wealthiest Americans, to being standard possessions of the average American family. Ford profited handily from the popularity of the Model T, and Ford Motor Company grew into an empire.

However, the dominance of Ford Motor Company was short-lived. As competitors changed their operations to copy Ford’s concepts mass production, Henry Ford made a tremendous leadership blunder. With cars rolling off assembly lines like never before, consumers began to demand a variety of colors. However, Ford stubbornly refused, uttering the famous line, “The customer can have any color he wants so long as it’s black.”

In Ford’s mind, producing multiple colors was foolhardy since black paint dried the fastest and could be used most efficiently. Amazingly, Ford did not comprehend the human preference for variety. Customers flocked en masse to other producers who catered to their color preferences, and Ford Motor Company never regained its grip on the market.

For so long, Henry Ford had focused on moving from inefficiency to efficiency that he refused to move in the opposite direction – from efficiency to inefficiency – even when doing so would have been wise and profitable. Ford’s genius in sparking change had catapulted him to the pinnacle of American commerce, but later, his inability to change cost him dearly.

Issues That Make Change A Challenge

Critics
Along the journey of leadership, you’ll meet all sorts of people, and I guarantee you’ll bump into a few critics. Early in my career, I didn’t know how to handle disapproval, and I bent over backward to keep everyone happy. In spite of my best efforts, I failed. Some of my people still didn’t like me.

Trying to appease everybody invites trouble. Appeasers end up being average because they always gravitate to the middle of the road. They’re afraid to make waves, and therefore, they avoid changes. My leadership began to take flight when I allowed myself to press people to change – whether they thanked me or cursed me.

People You Have Outgrown
As we climb the levels of leadership, we come to the sad realization that most people aren’t committed to personal growth. Friends who once shared our dreams begin to settle for second best. Members of our inner circle quit when the journey gets hard. If we are to change ourselves for the better, then we need to change the company we keep.

Eventually, we must change our relationships by disengaging from the people we’ve outgrown. Disassociating from colleagues can be especially painful given your history together, the contributions they have made in your life, and your personal feelings toward them. Disengaging is painful because you care about them. It’s painful because they may not understand why you’ve drifted away from them. It’s painful all the way around, but remember, unless you are willing to endure these pains, your own growth as a leader will be limited. Leaders only grow to the threshold of their pain.

The Weight of Responsibility
When we’re young, leadership has an idealistic appeal. We yearn to be in charge and out front, making the decisions. However, the reality of leadership involves the heavy burden of responsibility. Missteps by a leader can affect people’s livelihoods or an organization’s sustainability. The fear of getting it wrong can paralyze a leader.

If we, as leaders, want to make significant changes to increase our impact, then we must be willing to shoulder progressively greater loads. Although added responsibility gives us a greater opportunity to exercise leadership, it also magnifies the consequences of our mistakes. To be a change agent, a leader must be willing to take ownership of key projects and pivotal decisions.

Personal Inadequacies
As we grow in our leadership, we advance into uncharted territory – areas beyond our comfort zones. Such occasions give us growing pains by confronting us with our inadequacies. Our wisdom fails to solve a problem, or we stumble into a situation requiring more wisdom than we possess.

Facing our limitations can be daunting. At times, we’d rather stick to familiar roads than blaze a new trail and risk failure. Ultimately, pushing our personal boundaries is the surest way to grow, improve, and expand the scope of our influence.

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.

Decide Upon Your Major Definite Purpose

Since you become what you think about most of the time, a major definite purpose gives you a focus for every walking moment. As Peter Drucker said, “Whenever you find something getting done, you fine a monomaniac with a mission.” The more you think about your major definite purpose and how to achieve it, the more you activate the Law of Attraction in your life. Helping you to attract people, opportunities, ideas, and resources to move more rapidly toward your goal and move your goal more rapidly toward you.

Activate Your Reticular Cortex
Each person has within his or her brain a special organ called the “reticular cortex.” This small, finger-like part of the brain functions in a way similar to a telephone switchboard in a large office building. Just as all phone calls are received by the central switchboard and then rerouted to the appropriate recipient, all incoming information to your senses is routed through your reticular cortex to the relevant part of your brain or your awareness.

A Red Sports Car
Imagine that you decided that you wanted a red sports car. You write this down as a goal. You begin to think about and visualize a red sports car. This process sends the message to your reticular cortex that a red sports car is now important to you. A picture of a red sports car immediately goes up onto your mental radar screen. From that moment onward, you will start to notice red sports cars wherever you go. You will see them parked in driveways and in showrooms. Everywhere you go, your world will seem to be full of red sports cars.

Achieve Financial Independence
If you decide to become financially independent, you will suddenly begin to notice all kinds of opportunities and possibilities around you that have to do with achieving your financial goals. You will see stories in newspapers and recognize books on the subject everywhere you go. It will seem as though you are surrounded by ideas and information that can be helpful to you in achieving your financial goals. On the other hand, if you do not give clear instructions to your reticular cortex and your subconscious mind, you will go through life as though you were driving in a fog.

Your Major Definite Purpose
Your major definite purpose can be defined as the one goal that is most important to you at the moment. It is usually the one goal that will help you to achieve more of your other goals than anything else you can accomplish. It must be something that you personally really want. It must be clear and specific. Your goal must be measurable and quantifiable. Your major definite purpose must be in harmony with your other goals. If you use your reticular cortex and keep your goal in your mind you are bound to achieve it.

Action Exercise
Determine how you will measure progress and success of achieving your goal. Write it down.

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.

Don’t Quit!

One of my favorite poems is called Don’t Quit. One of the lines says, “So stick to the fight when you’re hardest hit; It’s when things seem worst that you mustn’t quit.” In our darkest hour it’s hard to see the end of our circumstance. All we can think of is our conditions worsening. But it’s usually at this time that our greatest growth can occur if we’ll see the moment as a growth opportunity-if we’ll see it as a time to learn how to control our thoughts toward an ideal that we cherish.

One thing I share with people who seek my advice when they think their life has come apart is to help them understand the power that even the tiniest of actions can have when taken in a negative situation. Remember in science class when we learned that “a body at rest tends to remain at rest; a body in motion tends to remain in motion”? This is especially true when overcoming circumstances because “paralysis” usually keeps us in the condition longer than we’d like.

But even more important, is that once we’ve started in motion, even though it may not seem like much, know this: It’s now only a matter of time before you’re out, totally out, of the situation that has got you down today.

I wish I knew who wrote this.  The Author is anonymous.   I hope it means as much to you as it does to me.

When things go wrong as they sometimes will,
When the road you’re trudging seems all uphill.
When the funds are low and the debts are high,
And you want to smile but you have to sigh.
When care is pressing you down a bit,
Rest if you must, but don’t you quit. Life is queer with its twists and turns,
As every one of us sometimes learns.
And many a fellow turns about,
When he might have won had he stuck it out.
Don’t give up though the pace seems slow,
You may succeed with another blow. Often the goal is nearer than
It seems to a faint and faltering man.
Often the struggler has given up,
When he might have captured the victor’s cup.
And he learned too late when the night came down,
How close he was to the golden crown. Success is failure turned inside out,
The silver tint of the clouds of doubt.
And you never can tell how close you are,
It may be near when it seems afar.
So stick to the fight when you’re hardest hit,
It’s when things seem worst that you must not quit.

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.

The Time to Act

Engaging in genuine discipline requires that you develop the ability to take action. You don’t need to be hasty if it isn’t required, but you don’t want to lose much time either. Here’s the time to act: when the idea is hot and the emotion is strong.

Let’s say you would like to build your library. If that is a strong desire for you, what you’ve got to do is get the first book. Then get the second book. Take action as soon as possible, before the feeling passes and before the idea dims. If you don’t, here’s what happens…

YOU FALL PREY TO THE LAW OF DIMINISHING INTENT

We intend to take action when the idea strikes us. We intend to do something when the emotion is high. But if we don’t translate that intention into action fairly soon, the urgency starts to diminish. A month from now the passion is cold. A year from now it can’t be found.

So take action. Set up a discipline when the emotions are high and the idea is strong, clear and powerful. If somebody talks about good health and you’re motivated by it, you need to get a book on nutrition. Get the book before the idea passes, before the emotion gets cold. Begin the process. Fall on the floor and do some push-ups. You’ve got to take action; otherwise the wisdom is wasted. The emotion soon passes unless you apply it to a disciplined activity. Discipline enables you to capture the emotion and the wisdom and translate them into action. The key is to increase your motivation by quickly setting up the disciplines. By doing so, you’ve started a whole new life process.

Here is the greatest value of discipline: self-worth, also known as self-esteem. Many people who are teaching self-esteem these days don’t connect it to discipline. But once we sense the least lack of discipline within ourselves, it starts to erode our psyche. One of the greatest temptations is to just ease up a little bit. Instead of doing your best, you allow yourself to do just a little less than your best. Sure enough, you’ve started in the slightest way to decrease your sense of self-worth.

There is a problem with even a little bit of neglect. Neglect starts as an infection. If you don’t take care of it, it becomes a disease. And one neglect leads to another. Worst of all, when neglect starts, it diminishes our self-worth. Once this has happened, how can you regain your self-respect? All you have to do is act now! Start with the smallest discipline that corresponds to your own philosophy. Make the commitment: “I will discipline myself to achieve my goals so that in the years ahead I can celebrate my successes.”

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.